Demand for long-distance rail travel is growing but incorporating it in managed travel programmes is not without its complications

By Mark Frary (Published 27 July 2023)

This November, a group of Swedish travel buyers will board a high-speed train at Stockholm central station. The train will whizz through central Sweden to Malmö, where they will board a sleeper train and cross the Oresund bridge into Denmark. At 6.30 the next morning, the train will pull into Hamburg Bahnhof. Their destination? This autumn’s GBTA-VDR conference.

Sweden’s rail company SJ came up with the idea of the trip and approached Fredrik Hermelin, general manager of the Swedish Business Travel Association (SBTA), to see if there would be interest.

When Hermelin presented the idea to buyers, the response was initially overwhelmingly positive. It is important to note that this is not a freebie: the buyers will pay €160 for their train tickets.

“They want to be on it because it is the right thing to do. However, when I said they would have to travel a full day to Hamburg and a full day back, some said they couldn’t be away for that length of time,” says Hermelin.

Gradually, however, more and more buyers signed up as they realised they could have meetings with fellow buyers on the train.

The thought process of the buyers offered the rail option to travel to GBTA reflects wider corporate indecision on train travel.

"The bigger that corporations are, the more hesitant they are about what they are going to do with business travel in the future. That is why some of the bigger corporations are travelling less," says Hermelin. Individual rather than group business rail travel is more of a challenge, he says.

Improvements needed

“It is terrible how poor cross-border rail is across Europe. We have so many trains but they do not collaborate,” says Hermelin. “BT4Europe is influencing the European Commission to put more pressure on the businesses. There is massive pressure on Brussels to force train companies to find a way forward.”

Europe, and individual member states, clearly need to do more. In June, the German competition authorities told state rail company Deutsche Bahn that it was in violation of competition law “due to abusing its market power in relation to mobility platforms” and has ordered it to change its practices. 

Andreas Mundt, Bundeskartellamt president, said it had concerns over data sharing, and bans on rivals taking advertising and offering discounts.

DB, which runs its own DB Navigator mobility app, had announced it would stop paying rival platforms ticket commissions and would stop third parties accessing real-time data on delays and cancellations. The authorities say it will now have to reverse these changes, although DB has said it will appeal.

Incorporating rail content

Such levelling-up moves at a European and national level will come not a moment too soon for TMCs trying to bring rail content into their online booking platforms.

Silverrail’s vice president, commercial, Brett Ring, says that for countries in which there is a single national rail carrier, it can be relatively straightforward for TMCs to offer rail by building their own connection.

“Where it's becoming challenging for TMCs is when there are new players coming to the market. It is brilliant for consumers and travellers because it drives competition and drives costs down but it brings complication for the TMC,” says Ring.

Agiito’s proposition manager for rail and ground transport, Jake Swithenbank, says fragmentation is a real problem. “There is a lot of bureaucracy, licensing requirements are really complex and bonding is prohibitive. What the rail industry is lacking on the global level is an organisation like IATA. It's hard enough in this country alone not having that one unified voice,” he says.

Liz Emmott, director of global distribution at Trainline Partner Solutions (TPS), says, “We’ve developed a global API offering integration to 13 different European carriers through a single portal, but even so TMCs still require separate contractual and licensing agreements from individual carriers.”

The answer, believes Emmott, is for aggregators like TPS and others to be granted sub-licences so that TMCs could simply book through a one-stop shop.

If TMCs and technology providers can solve these problems, there is certainly demand for more sustainable travel and rail, in particular, from business travellers.

A 2023 TPS survey found that seven out of ten respondents said they are prepared to travel by rail even if it took significantly longer than air travel. However, the survey also found that 56 per cent of respondents said their company currently doesn’t have a specific policy to support lower carbon modes of travel.

Some corporates are taking action, however. Emmott adds: “A lot of corporates… are creating carbon budgets as well as financial budgets for business travel, banning flights within the UK, and even banning cross-border flights for journeys of less than four hours.”

The latter echoes French government rules which came into force in May that bans air travel on routes which have rail alternatives where the journey time is less than two and a half hours. This has affected flights between Paris and regional hubs such as Nantes, Lyon and Bordeaux.

Sustainable appetite

But there are plenty of elephants in the sustainability (waiting) room too. Gray Dawes’ chief operating officer, David Bishop, says, “We don't see a lot of evidence of companies making CO2-based travel decisions, particularly where there's either a time or a cost differential. If a trip is going to take twice as long and your people are going to be half as productive, would you still choose rail? After all, we have just seen air fare inflation of 27 or 28 per cent and people have just worn that.”

SilverRail’s Brett Ring says there should be less focus on sustainability. “If rail services were on time and they were cost efficient and comfortable, then people would travel by train anyway. They don't need to be constantly told that they need to get on a train because it's greener,” he says.

Agiito’s Swithenbank adds, “Nothing is more sustainable than not travelling at all. You need to balance sustainability with the other benefits you get out of meeting in person, whether that's a wellbeing or a relationship benefit.”

The Swedish buyers’ rail trip to GBTA may be a one-off but Fredrik Hermelin believes things are starting to change: “I do believe there is corporate interest but it will only happen when you can rely on the departure and arrival time, when you don’t need to get up in the middle of night to do passport checks, and when you can book it all in one transaction. I think it is a still a few years off.”